Back to square one with ports

It’s back to the drawing board for the Cayman Islands government to find ways to redevelop the cruise ship port and Owen Roberts International Airport in Grand Cayman. 

At a media briefing following Tuesday’s Cabinet meeting, tourism minister Cline Glidden said the new interim five-member government is working closely with the United Kingdom’s Foreign and Commonwealth Office to ensure that new tendering processes for both projects would meet good practice procurement standards. 

“It has been made very clear to us by the UK government that the procurement processes that were being proposed and attempted both for the airport and cruise port did not fall in line with what we refer to as good practice and neither one of those proposals will be supported or allowed to move forward,” Mr. Glidden said. 

The expansion and improvement of the international airport in Grand Cayman was “critically important” to address overcrowding issues at the terminal during busy periods, the minister told reporters. 

He added that while, for the most part, funds for the project – generated by fees specifically relating to the airport expansion – were in place, the government and the Cayman Islands Airports Authority had to show the UK government that the proper procurement practice would be in place before any work could go ahead. 

“We’re happy to say that we have, with the assistance of the economic adviser provided by the United Kingdom … a process that allows us to present a business case and to present the architectural plans that will allow the procurement process to proceed in a manner that will be acceptable by the UK government in terms of good practice,” Mr. Glidden said. 

The proposed expansion would not involve the extension of the runway, he said. 

During the media briefing, Mr. Glidden also revealed that Cayman Airways wants to buy two aircraft that the airline leases. Those leases cost $6.3 million per year and are due to expire this year and in 2014. 

The minister said that the leasing company had provided an “attractive” purchase price and the proposal had been presented to Cayman Islands Governor Duncan Taylor and the British government. 

Going back to scratch in terms of tendering for the redevelopment of Owen Roberts International Airport effectively ends an August 2011 agreement between the Cayman Islands Airports Authority and the Canadian Commercial Corporation to partner to redevelop the Owen Roberts International Airport and Cayman Brac’s Charles Kirkconnell International Airport (formerly known as Gerrard-Smith International Airport). 

 

Cruise port 

Another deal that has been halted in its tracks due to failure to adhere to proper procurement practices is an agreement between the Cayman Islands government and China Harbour Engineering Company to develop a docking pier and revamp cruise ship berthing facilities in George Town and Spotts.  

The Foreign and Commonwealth Office in November ordered then-Premier McKeeva Bush to drop the China Harbour deal. 

Since 2003, the Cayman Islands government has been in talks with a number of different companies regarding the potential construction of a port berthing facility in George Town. Negotiations have been carried out with Misener Marine, Atlantic Star, Dart Enterprises Construction Company, GLF and finally China Harbour, but no final deal has ever been agreed. 

As a backbencher, Mr. Glidden had represented the Cayman Islands government in discussions to redevelop the port with some of those companies. 

Nigel Hearndon, a financial consultant hired and paid for by the Foreign and Commonwealth Office, visited the Cayman Islands for two weeks last month to help design a process for the development of the cruise ship terminal facility that was in line in procurement best practice and to analyse what went wrong with earlier proposals for the cruise ship terminal redevelopment.  

Minister Glidden said Mr. Hearndon had prepared an interim report, which he would be willing to release if the Foreign and Commonwealth Office agreed. That report clarified that the UK government would support infrastructure projects in Cayman only if their procurement processes adhered to good practice standards.  

The tourism minister, along with Dwayne Seymour, minister of community affairs, gender and housing, plan to meet with the Florida-Caribbean Cruise Association on 17 and 18 January “to try to start again a dialogue necessary to ensure we will be able to develop a facility to meet the needs of our cruise partners so they will continue to see Cayman as much sought-after destination”, Mr. Glidden said. 

The cruise ship industry has repeatedly called for Cayman to build berthing facilities here. Cruise ship passengers get ashore on board tender boats that carry them from the ship to land. A recent increase in tender fees has further soured relations between Cayman and the cruise ship operators, who see the increase as a blow to their bottom line. 

 

Not easy 

Going back to square one for the airport and port redevelopment is not necessarily an easy process, Mr. Glidden explained, as the projects involve intellectual property – in the form of business plans, environmental impact assessments and architectural drawings that have previously been done by companies that had agreed to carry out the work – that the government may not own. 

“The question [is] what components of the necessary procurement process are already in place that we could use and where ownership may lay of those. So, if we’re able to find a business model that is seen as being generic enough that is not favouring or aligning with any proposed or possible tender, then the question would be can we use that?  

“If we can use that business model, the question is going to be do we have the architectural and engineering plans that could be used and, for example, do we have ownership of that intellectual property that will allow us to use it again in a comparative tender without being biased towards 
any entity that may be interested or involved,” he said. 

The plans to which Mr. Glidden referred were drawn up as part of design-build projects proposed by previous sole bidders – a process that he said the UK government would not support on future development projects. 

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24 COMMENTS

  1. Take a good look at the five ministers facial expressions. Then match one of these five thoughts with the right person. The winner gets a new paved driveway.
    1. Why this waste of time- we’re broke?
    2I wonder if my first class air tickets to Paris are ready.
    3.One year without a license Maybe Uncle Bill has a sale on bicycles!
    4.Let’s not worry about a dock and airport I’m a new minister, I want a driver and body guard.
    5.Ya, Ya Julia , bla-bla-bla none of this matters , whatever we decide Ezzard will find something wrong with it.

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  2. Just wanted to add my 50cents worth on this topic. In my view government should focus on extending the airport runway as its priority, assuming it can obtain the necessary funding. If Cayman can accommodate long haul planes then that will open our dorrs to visitors from all over the world and not just North America. This would mean that we can attract visitors with money to spend and not be tied into the economic fortunes of adjacent countries. Opinions seem to be very mixed about the port and cruise ship dock. From what I hear most retailers find that Carival passengers don’t spend much onshore and their main contribution to the economy is the landing fee which goes straight to government. Maybe the situation needs to be reassessed if significant reductions in Carnival visits are planned to discover the truth.

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  3. One thing that really amazes me, is how the UK is having so much to say in Cayman Business these days. They never knew that we existed before, and closely kept a watch on us after the Faulkland War when they graciously received all of that money from Cayman. We were foolish then for that move. England does nothing for Cayman. Now she has us under a spy glass, just watching how we spend our money because she wants her people to bring it all back to London. We could have expanded the port and the Airport without UK telling us what to do. How many projects we have been doing in the past without UK having to dictate. The people from UK can see that we do not want to go to England although they gave us free passport. Stop dictating and let us live.

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  4. Rockman that is a good point on the airport but where are they going to stay?

    The biggest stayover market in the UK is the all-inclusive package. Last year First Choice made all their holidays from the UK all-inclusive and despite the recession they are flying packed aircraft out of the UK to destinations like the Red Sea and Cuba at silly cheap prices.

    The problem if you want that market is CIG need to stop messing around and sit down with not only the tour operators but also people who can build and run hotels at the rates that can sustain this type of business. Once the deals are set up they also need to sit back and let the professionals run things without any interference. I cannot see all that happening.

    Right now the cheapest deal I can find on-line for Grand Cayman in April (people here tend to book about 3-4 months in advance) is seven days room and breakfast for two at just on GBP900. That to me is a good price (and I know the accommodation is great because I stayed there last October) but coming from the UK you have to add BA flights at over GBP2000 and all your other expenses. So the total one-week budget for a couple is at least GBP3500 or a bit over US5000.

    At the same time they could do two weeks in either Sharm El Sheik or Cuba for GBP2500 and that is all-inclusive, flights, food, booze, transfers, the lot. All you have to pay on top are tips, any excursions, diving and some (but not always all) watersports.

    So there’s big gap to be covered in costs if you want to seriously exploit an expanded airport.

    As for the cruise lines. I posted a warning over a year ago that Carnival were looking at significant changes in their Caribbean routes and these did not include the Cayman Islands. The only reason the latest news has come as a surprise is because the people entrusted with protecting your tourism product do not seem to understand the way the whole industry (cruise and stayover) on this side of the Atlantic has been moving over the past five years. In fact I suspect there are people at the often criticised FCO who have a better understanding of the markets and also that they put the brakes on the cruise berth because they know it will not pay in the long run.

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  5. Hunter

    First of all, I am not British.

    Having said that, would you be kind enough to outline for me a comparison of what the UK gets from having Cayman as a territory compared to what Cayman gets for being one. This one I have to see.

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  6. The airport should be moved east and the land sold to pay for the new airport When a plane crashes it will crash next to the runway…How third world.
    And those old cayman airway planes what sucker would want them they are old junk.

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  7. Already we are having businesses close down in town. I took a walk the other day in town and counted 5 stores I noticed closed down from last month. And these are small business owners. So I strongly believe we are not having enough cruise ship tourists and locals are being burdened with the high cost of living. People are not going to take it for long. Some people have a breaking point before they consider breaking the law… I can sense George Town is becoming a ghost town. Just take a walk through town one day and you will see what I mean. Where are the people like use to have 5 to 6 years ago? If businesses continue to close down, less work, and less customers, I am afraid it is going to have ill effect on the sociological structure of our country! Already arm robberies are on the increase again, youngsters are out of school, many looking to have a decent job, and the well-off businesses that are raking in the monies, are taking advantge of the small ones. All like the other day, I heard Dart have shuttle buses transporting tourists to Ritz and Turtle farm. Small taxi drivers are losing income because of it. This man has all the money the world, and he is deliberately monopolizing the economy. He is vulture capitalist. He has all the liquor businesses except Jacque Scotts. He wants control over the market prices, and almost got control over the country’s port. It is almost like this economis downturn by this government was plan to benefit a few. Notice that McKeeva Bush had over 3 years to start this port, but deliberately complied with the UK on proper process. Note he was side-by-side and is fond with Dart. The ForCayman Alliance deal is really a Dart control deal whilst the Port and those things that can help small businesses are put on the back burner.

    Sorry, but my sentiments is expressed and shared by many others like me in Bodden Town district. We feel that this economic downturn was all conspired for the big fish. Both the UK and our local politicians are guilty of looking out for big people whilst we the people have to suffer. We will continue to see and believe in this conspiracy until we have no further reasons not to see this way. So sorry for those who have some loyalty for a party or UK government officials. We Caymanians are sick and tired of talk and prolonged talk over matters that don’t really concern us and the future of our children.

    Bodden

    SOLUTIONS

    We need a government that will come with quick solutions. The private sector is hurting, and it is the private sector that will bring us back to where we came from. We need a government that is not bent on increasing its size and its fees and duties on people and businesses. It is these increases plus antibusiness laws that are really hurting the goose that lays the golden eggs. Once the goose go, Cayman has lost its financial productivity.

    May we learn well before

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  8. Hunter

    To put it politely you are not very bright are you? You think the UK with all of its current economic problems wants to be involved in Cayman Politics or in any way wants to be involved in the running of the country? No way. It HAS to to protect the Cayman people from their government. Why did these projects go back to the drawing board? Because the last incumbent worried about his brown envelope first and the country somewhere much further down the line (2nd would be too high)

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  9. To answer Hunter’s question. what has the UK done for Cayman.

    Well for starters. They financially bailed Cayman out, at least 3 times.

    That in itself is millions of dollars.

    Without the UK, Cayman would have been sunk the first year of the UDP term.

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  10. I believe there is a environmental risk in dredging the area off George Town to a minimum depth of 40 feet that has yet to be studied sufficiently in the form of an environmental impact assessment.
    Dredging a big hole in the end of 7 mile beach will form a catch basin for the sand which freely moves along the beach.
    In severe NW storms having 40 foot depths producing waves will create havoc in downtown George Town.
    There is much more involved here than slapping in a finger pier and digging some sand.
    If we harm the gem of the country in the form of 7 mile beach the tourism product is severely impacted.
    Proceed with caution.

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  11. As a long time Morritts TC owner and regular visitor to GC I would like to voice my opinion about the cruise ships. Over the years I have observed many changes that have taken place on GC and not all of them are improvements. I remember when Family Bakery and Hogsty Bay Cafe were thriving businesses right downtown. As the cruise industry has increased tourism in the Caribbean, many of the islands, GC included, have become dependant on tourism for their whole economy and have lost other industries. This is a very sad state of economics. The islands must find a way to be independant of tourist dollars to remain stable societies. The impact of the ships and tourists on the island’s eco-environment is not a positive result.

    I do hope the current government will reconsider and choose to not build a pier, especially one that will accommodate the current mega-ships.

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  12. Great argument Louise.
    So,how do you propose they made jobs out of thin air?

    Cayman has no mines, no export. No real land to create an export industry that would replace the lost jobs due to lost tourism.

    So…how do you propose this solution, of abandoning tourism, and creating jobs.

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  13. @big berd – I agree that the UK does provide (mostly intangible) benefits to Cayman. However, the UK has at no time, let alone three, bailed out Cayman. I don’t know where you got that idea. Are you confusing approving additional borrowing by Cayman with a bail out? The truth is that applying most debt ratios Cayman is better off than the UK.

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  14. you are serious aren’t you, speaker?

    What about the money Cayman borrowed from the UK just this year.

    Do you not remember, the UK telling cayman that they have to reign in their budget. Because the government expenditures were too high.

    Why do you think that is? Because the UK loaned Cayman money.

    If you did not get that loan, NO ONE from the government would have been paid for months.

    If you don’t call that a bailout. What is your idea of a bailout then?

    And that answer’s hunters question, of what the UK does for Cayman. It’s kept cayman afloat for the last 4 years.

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  15. @big berd – by this year I assume you mean 2012. Just in case I missed it can you please link the article which says that Cayman borrowed money from the UK in 2012 or at all.

    Again, the UK giving approval for Cayman to borrow does not mean that the UK is lending Cayman the money. The UK requiring Cayman to implement the FFR does not mean a UK bailout. And lending would only amount to bailout if it was on preferential terms that could not be obtained in the credit markets.

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  16. Obviously the topic at hand is not of interest to many contributors but let me put it this way. If the finger pier and dredging off George Town suffers the worst case environmental scenario then all those involved will have earned the distinction of having destroyed Cayman’s economy.

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  17. To answer confused 10:02 and also your confused friend Big Berd 10:34 I dont know which one of you is more confused. However good name.
    Please enlighten me when and where and how did the UK Bail out the Cayman Islands. I know that you are completely loosing it by having such thougts.
    UK need Cayman, we do not need UK, because we have been swimming alone for all these years. So you are really confused. I have been born many many moons ago, old enough to be your grand father and I know what go on in this Island from then. Do you think UK is going to squirm their way out of this conspirary which began all the way back from Jim Bodden Days. Listen to me confused child we have the proof, that is why we can talk.

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  18. Big Berd, are you sure that you can understand well and read well, because if you can I would like you to put it in black and white, where Cayman Borrowed any money from England Last year. You and confused has to be the same person, so my suggestion is to please seak some other legal advice what it all meant.I am surely not getting through to you.

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  19. I am glad that big berd brought up the notion that Cayman was bailed out by the UK because, given the number of thumbs up he received, there are quite a number of other posters who are equally confused about the situation and it provides the opportunity to correct a myth. But I understand the source of their confusion. The Daily Telegraph and some other other international media sensationalised the story and called it a UK bailout. Big berd and others I am sure didn’t bother to read the whole articles to discover that Cayman was covering its revenue shortfalls by commercial loans, and not loans from the UK. UK approval was only required because our laws say it must be once we breached the principles of financial responsibility (which it is fair to say that the UK itself would not pass).

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  20. Confused, you are spot-on. Follow the money or in this case and many others, the brown envelope. The UK stepped in for this very reason.

    The governor blew the whistle on this one because that is the most important reason he is here and should be commended for rooting out evil.

    In my opinion it is way too late for the cruise industry. You snoozed and loosed. Something so basic as proper procurement practices didn’t happen because someone might have noticed line item 69 that would show a 6.9% FINDERS FEE. Enough said.

    Shows over folks, nothing to see here.

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  21. Or…in more colloquial terms not used very often in Cayman…KICKBACKS…into politicians and their chosen business partners pockets.

    You’ve hit the nail squarely on the head here.

    This is the ‘big one’ and the UK had to stop the rot before it set properly.

    Hopefully the auditor general will now have a clear path to do his job of cleaning up whatever else he can…

    Now that a certain party is out of the picture…

    For now, at least.

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  22. This article definitively puts to bed the misconception that the UK bailed out Cayman:

    http://www.compasscayman.com/caycompass/2013/01/15/MP-hugely-overestimates-UK-s-Cayman-spending/Mr.

    OT Minister Simmonds responded: The Foreign and Commonwealth Office has committed 635,046 over the past five years for specific projects in the Cayman Islands, which support our criminal justice strategy, promote good governance and protect the Islands’ environmental biodiversity. The FCO has not lent money or provided aid to the Cayman Islands government.

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